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					          VALUATION
            OF
          QUOTED SHARES

Working Party on Financial Statistics
  2– 4 November 2009 – Item 3.a.
   by Michèle Chavoix-Mannato (STD)
        VALUATION OF QUOTED SHARES

Main objectives
• To remind Delegates and experts of the work already
  carried out on the measurement of equity
• To inform them on changes resulting from SNA 2008
• To present a new survey on the valuation of unquoted
  shares



    Delegates are invited to discuss this survey
            and propose amendments
            VALUATION OF QUOTED SHARES

Historical background
•   In SNA 1993:
    o No breakdown of ‘Shares and other equity’
    o No reference to the valuation of shares

•   Since 2002
    o Eurostat WGUS: approval of an addendum Issue N°9 to the Manual
      on Sources and Methods (April 2004)
    o OECD Workshop on Unquoted Shares: collection of methodological
      information (limited number of countries) and volunteers to test the
      European method (October 2004)
    o OECD Task Force on the Valuation and Measurement of Equity
      (TFVME): review of practical approaches in OECD countries;
      recommendations relating to valuation & further breakdown; and
      transmission of preliminary conclusions to the AEG (April 2005)
         VALUATION OF QUOTED SHARES

Historical background (cont.)
  o Advisory Expert Group on National Accounts: commitment to
    the Task Force of documenting reasons for changes and
    proposals (July 2005)

  o OECD TFVME: proposal for two possible approaches, either
    Market capitalisation method, or Other methods (NAV, PV,
    OFBV..) and agreement for flexibility; support to split AF5
    between Corporate shares (AF51) and Investment fund units
    (AF52) (October 2005)

  o Advisory Expert Group on National Accounts: agreement on
    the principle of flexibility in the treatment of unquoted shares;
    report of the decision for a further breakdown of AF5 (February
    2006)
         VALUATION OF QUOTED SHARES

White-cover version of SNA 2008
Approved by the Bureau of the UNSC in August 2008:
o Chapter 3: general remark on issues regarding the non-
  availability of market prices and the substitutive methods
o Chapter 11: new appellation for F5/AF5 ‘Equity and
  Investment funds shares’ and breakdown between Equity
  (F51/AF51) and Invesment funds shares (F52/AF52), and
  further split of F51/AF51
o Chapter 13: enumeration and definition of the various
  methods of valuation; invitation to compilers to be
  transparent and clearly state the method they use.
         VALUATION OF QUOTED SHARES

                   FOLLOW-UP
• Need for updated information on national
    practices for the valuation of unquoted shares
•   Need for greater country coverage




•   Proposal: to launch a survey among all OECD
    countries to know which method is currently
    applied (or will be applied)
           VALUATION OF QUOTED SHARES

          Content of the new survey to be launched
          after the meeting, if approved
•   General questions regarding
    o the current situation in financial accounts and financial
      balance sheets
    o the consistency with BOP and IIP statistics

•   Specific questions on the sources and methods of
    Equity (F51/AF51 and its three components)
•   Additional questions regarding Investment funds
    shares (F52/AF52)
           VALUATION OF QUOTED SHARES

Specific questions on the sources and methods of
Equity (F51/AF51 and its three components)
•   Main sources and supplementary information used for
    quoted shares, unquoted shares and other equity
       For each source, detailed information of the frequency,
        timeliness, coverage, valuation ….
•   Method used for quoted shares
     Market prices or other valuation

•   Method used to compile unquoted shares
     Method recommended by Eurostat

     Method proposed in the SNA 2008
           VALUATION OF QUOTED SHARES


Additional questions regarding Investment funds
shares (F52/AF52)
• Availability of components of Investment funds shares
     according to the composition of their assets:
       o Money market funds
       o Other types of funds
     between listed and unlisted shares

• Main sources used
• Valuation of investment funds shares
        VALUATION OF QUOTED SHARES


                  Conclusion

•   Delegates are invited to endorse the
    OECD proposal to launch a new survey on
    valuation of unquoted shares

•   Delegates are invited to comment the
    content of the survey and to amend it if
    necessary

				
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